Instructions For Form 8804 printable pdf download

Schedule A (Form 8804) 2007

Page

General Instructions

If Part II, line 1 is $500 or more, complete the rest of page 1 to

determine the underpayment for any of the installment due dates.

What’s New

If there is an underpayment on line 12 (column (a), (b), (c), or

(d)), go to Part VII to figure the penalty.

Final regulations under section 6655 provide guidance with

respect to estimated tax requirements. These regulations are

Complete Parts IV through VI as appropriate if the partnership

applicable for tax years beginning after September 6, 2007.

uses the adjusted seasonal installment method and/or the

annualized income installment method.

For partnerships that elect to use the annualized income

installment method, extraordinary items (as defined in Regulations

Specific Instructions

section 1.6655-2(f)(3)(ii)) generally must be taken into account

after annualizing the effectively connected taxable income for the

Part I. Reasons for Filing

annualization period. Similar rules apply if the partnership uses

the adjusted seasonal installment method. See the instructions for

Adjusted seasonal installment method and/or annualized

Parts IV through VI.

income installment method. If the partnership’s income varied

during the year because, for example, it operated its business on

Purpose of Form

a seasonal basis, it may be able to lower or eliminate the amount

of one or more required installments by using the adjusted

Partnerships that have effectively connected taxable income

seasonal installment method and/or the annualized income

(ECTI) allocable to foreign partners use Schedule A (Form 8804) to

installment method.

determine:

Example. A ski shop, which receives most of its income during

Whether they are subject to the penalty for underpayment of

the winter months, may benefit from using one or both of these

estimated tax and, if so,

methods to figure its required installments. The annualized

The amount of the underpayment penalty.

income installment or adjusted seasonal installment may be less

than the required installment under the current year safe harbor

Who Must File

(increased by any reduction recaptured under section

Generally, the partnership does not have to file this schedule

6655(e)(1)(B)) for one or more due dates. Using one or both of

because the IRS will figure the amount of the penalty and notify

these methods may reduce or eliminate the penalty for those due

the partnership of any amount due. However, even if the

dates.

partnership does not owe a penalty, complete and attach this

Use Parts IV through VI on pages 2 and 3 of Schedule A (Form

schedule to the partnership’s Form 8804 if the Part II, line 1

8804) to figure one or more required installments. If Parts IV

amount on page 1 is $500 or more and either of the following

through VI are used for any payment due date, those Parts must

applies:

be used for all subsequent payment due dates. To arrive at the

1. The adjusted seasonal installment method is used.

amount of each required installment, Part VI uses the smallest of:

2. The annualized income installment method is used.

The adjusted seasonal installment (if applicable),

The annualized income installment (if applicable), or

Who Must Pay the Underpayment Penalty

The current year safe harbor (increased by any reduction

Generally, a partnership is subject to the penalty if it did not timely

recaptured under section 6655(e)(1)(B)).

pay at least the smaller of:

Follow the steps below to determine which parts of the form

1. The tax shown on line 5e of its 2007 Form 8804 or

have to be completed.

2. The total section 1446 tax that would be due for 2007,

If the partnership is using only the adjusted seasonal

without regard to partner certificates, computed using the ECTI

installment method, check the applicable box in Part I and

allocable to foreign partners for 2006, provided that (1) this

complete Parts IV and VI of Schedule A (Form 8804).

amount is at least 50% of the sum of the amounts shown on lines

If the partnership is using only the annualized income

4c, 4f, 4g, and 4j of its 2007 Form 8804 and (2) the tax year was

installment method, check the applicable box in Part I and

for a full 12 months. See the instructions for line 2 below for more

complete Parts V and VI of Schedule A (Form 8804).

details.

If the partnership is using both methods, check both of the

In these instructions, “Form 8804” generally refers to

boxes in Part I and complete all three parts (Parts IV through VI)

the partnership’s original Form 8804. However, an

TIP

of Schedule A (Form 8804).

amended Form 8804 is considered the original Form

8804 if the amended Form 8804 is filed by the due date

Part II. Current Year and Prior Year Safe

(including extensions) of the original Form 8804.

Harbors

The penalty is figured separately for each installment due date.

Therefore, the partnership may owe a penalty for an earlier due

Line 2 (prior year safe harbor). Enter the total section 1446 tax

date even if it paid enough tax later to make up the

that would be due for 2007, without regard to partner certificates,

underpayment. This is true even if the partnership is due a refund

computed using the ECTI allocable to foreign partners for 2006.

when its return is filed. However, the partnership may be able to

The partnership may generally use the prior year safe harbor

reduce or eliminate the penalty by using the annualized income

only if it paid the required amount using that method for each of

installment method or the adjusted seasonal installment method.

its installment payments of section 1446 tax during the tax year.

See the instructions for Parts IV and V for details.

However, see Regulations section 1.1446-3(b)(3)(ii) for an

exception. Also, see the Note below. In addition, the partnership

Exception to the Penalty

may only use the prior year safe harbor if all of the following apply:

A partnership will not have to pay a penalty if the tax shown on

Each installment payment that was made during the tax year,

line 5e of its 2007 Form 8804 is less than $500.

when averaged with all prior installment payments, must have

been 25% of the partnership’s total section 1446 tax liability

How To Use Schedule A

under the prior year safe harbor,

Complete this schedule as follows:

The prior tax year consisted of 12 months,

Check one or both of the boxes in Part I that apply. If the

The partnership timely files (including extensions) a U.S. return

partnership checks a box in Part I, attach Schedule A (Form 8804)

of partnership income (e.g., Form 1065) for the prior tax year, and

to Form 8804. Be sure to check the box on Form 8804, line 8.

The amount of ECTI for the prior tax year is not less than 50%

of the ECTI shown on the current year Form 8804 that is (or will

be) timely filed.

Instructions For Form 8804

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